Maynard makes a point of fundamental economics
I can rattle on endlessly about economics (and you decide whether I know what I’m talking about). Here, at the risk of oversimplification, I’ll just hit the high point.
The major economic problem America faces is we’re out of balance. The nation consumes more than it produces, resulting in an international balance of payments deficit. As we buy from abroad, dollars flow out of America into the world. Those dollars either slosh around in various world banks, or they drift back in the wrong ways…through loans or purchases of the American infrastructure. This creates unsustainable trends and periodic crises. We can’t borrow forever and we can only sell America once.
We got to this point because we’ve off-shored more than we’ve (to coin a term) on-shored. A candidate for positive change should be asking the hard questions about why so many businesses find it advantageous to go abroad. But the inquiry should start by understanding that businesses have acted rationally and reasonably. The national goal must be to increase national competitiveness and lure business home, rather than to coerce and curse. As the great Robert Heinlein once noted, you don’t get milk by beating a cow.
Sadly, the political action we’ve seen has been counterproductive. “Stimulus” (I hate that word!) means artificially boosting consumption, either by sending you a check (as Bush did) or by government spending (as Obama is doing). The underlying theory is we can consume our way to prosperity, and that’s nonsense. The “stimulus” may (or may not) provide a moment of apparent relief, but in fact the global imbalance is perpetuated and even accelerated. For example: My neighbors took their $600 stimulus check over to Circuit City and bought a new TV…but Circuit City still went broke, and the money merely “stimulated” a Chinese manufacturer, from where the stimulus fund was borrowed in the first place. You don’t have to be a rocket scientist to see the problem here.
Likewise, the real estate bubble was fueled by political pressure to make easy money available for real estate loans. Our government gave us, in effect, a “stimulus package” for housing. The influx of money created an artificial boom. This looked good on the surface because everyone was making money doing nothing; however the economy was not expanding in a way that increased productivity. In fact, the high real estate prices ultimately become a drag on the economy, since they raised the cost of living, thus necessitating more government “help”…this became a vicious circle that was doomed to ultimately implode.
Obama’s political agenda is destructive. Cap and trade will set a limit on national production. His cronyism protects overpaid union jobs, whose labor monopolies are part of the problem of an uncompetitive America. His stimulus packages replace productive private decisions with wasteful public ones. The foundation of capitalism is capital, and investors will be wary of investment in an Obama-directed world. Remember how Obama said we could freely invest in coal-generated energy…but if we did, he would bankrupt us? Our economic future is no longer determined by individual decisions, but by Obama’s whim. This does not bode well.
It’s become painfully clear that the nation is being driven toward bankruptcy. If Washington were sane, this would be the primary concern of our lawmakers. Instead, they’re gearing up for the next blitzkrieg against the American people; meanwhile the report on the latest budget catastrophe is hidden away until the summer recess, lest we get further confirmation of how far astray we’ve gone.
For the purpose of national survival, we must minimize thinking in terms of Left/Right and concentrate on sane/insane. There are many on the Left who don’t want to go broke. At the risk of finding some small amount of common cause with the evil right or left wing, it’s time for us all to unite against catastrophe.
Can’t get any clearer than that… great job!
“it’s time for us all to unite against catastrophe”
I’m not really one who is up on “economics” or the “market” or things of that nature.
But what I do understand is “common sense” and “logic” and everything you just said, Maynard, is exactly that – “common sense” and “logic”.
And I’m getting the feeling that many more Americans, even ones that voted for Obama, are having “buyer’s remorse”. They were tired of the Republicans and in typical American fashion, they voted for “the other guy” to see what would happen.
That is part of the problem. The Republican Party, the one I thought would be sort of like the parent and would reign in the insane stuff, has stopped being the parent and has started to be the child, save for a few members. So our choice at election time was Child #1 and Child #2 (granted Child #2 was backed up by an actual adult, but all the children didn’t like her because she made too much sense, and she was actually likable).
So the problem is more inherent in what we have allowed to happen to our politicial system. We have let it become an almost one party system, as my political science professor described: The difference between a Democrat and a Republican is that the Democrat will give you 4 bottles of milk and $2 and the Republican will give you 2 bottles of milk and $1. And frankly, from that point on, I actually saw how that was the case.
And at first I didn’t mind it that much, because I considered myself a moderate liberal.
But now that’s changed. Now I’m a CONSERVATIVE; a right-wing extremist, if you will, like Jefferson, Washington, etc.
And I realize that the parties have to be different, otherwise, this cycle will continue until America just folds. Republicans have to change themselves back into the Conservative party, or we need another one to take over that role.
We need an adult here and all we’re getting are young children (“That’s not fair!”) and maybe a few college kids (“Play now, pay later!”).
And so I hope that many more actual adults are going to start seeing that this is getting ridiculous. That even if we don’t always agree on every issue, that we can at least agree to be FISCALLY RESPONSIBLE!